Reactions to the Buffett Rule: Put Down those Vapors!

April 13th, 2012 at 1:53 pm

The idea that some very rich people pay a smaller share of their income in federal taxes than many in the middle class strikes most Americans as unfair. But you wouldn’t know it around here. While there’s some variation, many in the DC chin-stroking, gum-flapping, chin-music-making class have been quite critical (and yes, I’ve stroked the chin and flapped the gums with the best of them).

Dana Milbank at the WaPo judges the rule to be a campaign gimmick. Art Laffer plays the class warfare card at the WSJ. And the scholars at Tax Vox call it “a terrible idea,” arguing that “…imposing a minimum tax of any kind is an admission of policy failure. If the president thinks the rich don’t pay enough, he ought to restructure the tax code so they do, not stick on yet another Band-Aid.”

OK, these critics have some points. Yes, Dana, there’s politics in here—shocking, I know. But far too often, when someone proposes a fix to something wrong in the tax code, the punditry reacts with palpable dismay—it’s not comprehensive, 86-style reform! It’s not a flat tax! It doesn’t lower the rates and broaden the base! It’s not a VAT! Quick, pass me the vapors before I swoon!

First of all, tax reform is over-rated. There, I said it.

What is “tax reform” anyway? For some it’s having just one rate, for others it’s a national sales tax, and for most it’s trading off lower rates for a broader base. For all, it’s simplifying the current system (for me, it’s ending favorable treatment of one kind of income over another).

Worthy ideas, I’m sure. But answer me this: with 98% of House Republicans having signed the Norquist pledge, is this the moment to oppose a simple measure that corrects some of the problems that plague the current code? Comprehensive reform requires compromise, and that’s off the table. I’m pretty sure that if you tried to “lower the rates, broaden the base” right now, you’d get a lot more of the former than you would of the latter. There were numerous R candidates in the primary campaign who proposed flat taxes. Remember how they scored?

I know—the Buffett rule’s not going anywhere either. Nothing is. But why should that preclude the fight to add some progressivity, some fairness, back into the code…to try to do something short of comprehensive reform that would amplify and address the problem of low effective rates among some of the very wealthy, a problem that’s exacerbating our serious inequality problem?

The fact that we need a Buffett rule may well be “admission of policy failure”—if so, then I admit it! And I think we should fix it ASAP. So put aside the vapors, my fellow pundits, as let us step into the breach as one!

Update: FWIW, the people diverge from the DC punditry on this one:

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9 comments in reply to "Reactions to the Buffett Rule: Put Down those Vapors!"

For me, tax reform is ending favorable treatment of one kind of income over another and eliminating spending from the tax code. I think a lot of tax credits and subsidies are worthy and should be continued, just not in the tax code. It muddies the water on how much spending is actually occurring.

I think the only way we’ll see tax reform is if Romney wins and the GOP wins a Senate majority. It won’t be tax reform I’ll be happy to see, unfortunately.

I don’t believe Dems would execute any tax reform if they won back the House and retained the White House. I’d expect more “admissions of policy failure” like the Buffett rule.

Totally agree with the point, but I gotta correct the usage of “vapors.”

Pundits in extremis may suffer from “the vapors,” the term referring to supposed internal emissions thought to lead to swooning. Probably caused by chin-stroking or excessive balance-seeking where there ain’t none.

Smelling salts, or a dose of reality, should be passed to the sufferer having a Blanche Dubois moment.

I do think some political points could be scored, and at least some degree of paralysis of the DC punditry, if this point was made: “We were supposed to avoid this unfairness with the Alternative Minimum Tax. Instead, Republicans did their billionaires’ bidding, hijacked it for them, gave them gigantic loopholes and made it apply only to some suckers in the middle class. Let’s just make the AMT work the way everyone expected it to work.”

Shoring up existing policy against holes is a less assailable message from the alleged “center” than starting something new and “radical.” And by the way, you Republicans and independents with higher-than-average but still middle class incomes, including many of you media stalwarts with nice but less than superstar salaries: this hole in the AMT (big enough to drive an oil tanker truck through, if you get my drift) means you, too, are getting screwed directly. How long are you going to continue being a sucker for stuff like this?

I’m sure it has been pointed out before, but as far as I’m concerned this can’t be emphasized enough: Republicans and conservatives have been waging class warfare against the working class forever, and more recently, against the middle class as well. When it comes from the collection of people who convinced their base that all people on welfare are frauds, that “welfare queens” were the rule rather than the exception, and who came up with the term “Lucky Duckies” to describe people who don’t earn enough money to pay federal income tax, accusations of class warfare because of the ‘Buffett rule’ are hypocritical in the extreme.

Seems to me the Political battle is over Tax Revenue, Current spending and the Pace of debt reduction consistent with your favorite model of economic growth.

I hope Obama is able to frame this choice and the voters understand the D versus R solution. This is the essential argument to have and this election may be the first one where the debate is fully engaged. (I can hope at least)

Once the voters agree on the relative balance. Then you can consider “Tax Reform” as the means to get there.

Tax Reform was last approached under the premise that it would be scored as revenue neutral. Obviously, that is not an option. The media step into the tax fringe of the briar patch to pretend that they are working hard for the voters.. when really, they don’t understand the issues at all.
Thanks for the blog!